Germany's 2027 draft budget is finalized, Handelsblatt reports

By Maria Martinez and Holger Hansen

BERLIN, June 26 (Reuters) - Germany's 2027 draft budget has been finalized, German newspaper Handelsblatt reported on Friday, citing sources, saying that Finance Minister Lars Klingbeil has reached a final agreement with cabinet colleagues.     

The initial budget shortfall of €21 billion ($23.94 billion) has been fully closed and the individual budget plans for each ministry are ready, Handelsblatt said.

To close the shortfall, Klingbeil will have to draw on part of a reserve of €9.7 billion, the report said, although he had previously said he hoped to leave it untouched when he presented the key points for the 2027 budget.    

A finance ministry spokesperson declined to comment on details and pointed out that the cabinet is due to approve the government draft as planned on July 6.

Tapping the reserve was necessary because the expected savings had not been fully achieved and there were unplanned expenses resulting from the U.S.-Israeli war with Iran, Handelsblatt reported.

Thanks to some of these cuts, however, it was possible to reduce the budget gap for 2028, which was just under €30 billion.

($1 = 0.8772 euros)

(Reporting by Maria Martinez and Holger Hansen; editing by Matthias Williams and Paul Simao)